Institutional interest in Solana rises as ETF and treasury company AUM increase

Institutional interest in Solana rises as ETF and treasury company AUM increase.

REX-Osprey Solana Staking exchange-traded fund (ETF) is nearing $300 million in assets under management (AUM). The ETF, launched only a few months ago, now has $289 million in assets.

The surge in AUM follows recent inflows into the ETF, which has now had five days of consecutive inflows for the first time since its launch. According to Farside Investors’ data, the product has seen $23 million in inflows in the past three days.

The  $10 million inflow on September 16 was a major contributor. This is one of the biggest daily inflows for the product since its launch on July 2.

This shows the rising demand for the product, reflecting the interest in Solana.  The REX-Osprey SSK  is the first crypto ETF to offer staking rewards in the US, with 100% of the rewards going to shareholders.

Meanwhile, cumulative volume for the SSK ETF has now surpassed $1 billion, further showing the rising demand for the product, especially in the past few weeks.

Solana treasury companies fuel corporate demand for SOL.

Interestingly, the inflows into SSK only represent a small percentage of the institutional demand for  Solana. While expectations are high about spot Solana ETF approvals,  the Securities and Exchange Commission (SEC) has yet to decide.

In place of ETFs, digital asset treasury (DAT) companies have been fueling SOL corporate purchases.  Over the past few months, these companies have spent billions to acquire SOL.

According to CoinGecko, nine publicly traded Solana DATs now hold over 13 million SOL. This accounts for 2.46% of the Solana supply. Interestingly, publicly available data shows there are more companies.   17 Solana treasury firms now hold 17.1 million SOL.

The biggest holder is Nasdaq-listed Forward Industries, also one of the newest. The company, backed by Multicoin, Jump Crypto, and Galaxy Digital, is emerging as the Strategy of Solana with 6.822 million SOL.

However, it remains very much in the accumulation phase. It recently announced a plan to raise $4 billion through an at-the-market equity offering focusing on using the funds to buy more SOL.

Interestingly, the inflows into corporate treasuries for SOL coincide with the slowing momentum for Bitcoin treasuries. While companies like Strategy and Metaplanet have bought massive amounts of BTC this year, the number of new companies buying  BTC declined in August.

SOL price correction enters third day

Meanwhile, the interest in SOL from institutions has not stopped the asset from seeing two days of consecutive price decline. According to CoinGecko, SOL is down more than 2% in the last 24 hours.

This means it has fallen from around $248 peak on September 14 to $235. While it has been up 5.4% in the past seven days, it is unclear whether further decline will occur.

With SOL declining, the value of financial products connected to the altcoin has also fallen. Shares of SSK dropped by 2.48% in the past 24 hours, declining to $35.73, while Forward Industries FORD also fell.

Retail interest is also yet to return for Solana and other crypto tokens. According to data from Alphractal, Google searches for crypto increased substantially during the late August rally but have now declined.